Different perspective on IMG, past and present, worth noting

One can only feel sympathy for Ted Forstmann as he battles brain cancer. I wish him well as he fights to recover his health.

I also applaud his focus on philanthropy. I understand he is a good man in this respect.

However, as a past employee of Mark McCormack’s IMG, I feel compelled to set the record straight regarding the comment Ted recently made in The New York Times about the IMG he bought in 2004. In the story, which ran on May 23 and was excerpted in SportsBusiness Daily, Ted said, and I quote, “It was a piece of [expletive].” That IMG he refers to does not remotely resemble the company as it is today. The Mark McCormack IMG was an exciting, innovative, family of hardworking, creative, loyal men and women.

Within weeks of obtaining control of the company, Ted, and his accountants, began destroying the heart of the organization. In the name of improved EBITDA, the financial wizards depleted the people who built the empire that Mark so brilliantly led. Ted parted with exceptional human beings, to improve the short-term book value of the company, hoping for a quick sale and an unearned profit for Forstmann and his investors.

But a funny thing happened on the way to the bank … the marketplace knew what was going on. Ted underestimated the collective intelligence of the businessmen who run the sports industry. Perhaps he anticipated potential buyers would be like his “Barbarians at the Gate,” LBO specialists who didn’t really understand how companies actually worked, what they stand for and how they integrate in an industry. That was one of his big mistakes.

And, “Oh, by the way,” the senior management at IMG who negotiated the terms of the $750 million purchase price look to have been considerably smarter and more shrewd than Ted and his legion of bean counters. Building a company from scratch, in a competitive, new industry will make some pretty good negotiators out of people.

There are a couple of other points worth noting. First, Ted continually talks about how profitable he has made IMG, a company he says was “barely break-even” when he bought it. There has never once been the release of any type of audited statement to prove this newfound profitability. And if the company is so profitable now, why are there no suitors lining up to purchase it?

All the brazen braggadocio about IMG’s recent international expansion is a revisionist history. That expansion was under way long before Ted came on the scene and is well-documented. Mark was in South America in 1990 (Project Cape Horn), China almost 20 years ago, and we were running cricket events all around the world two decades ago.

Finally, Ted’s view of success and Mark’s couldn’t be further apart. Mark wanted to contribute to the growth of sport around the world. He was an innovator and a builder. He didn’t value personal profits over people. His greatest legacy may well be all of the executives that grew up under his mentorship, too numerous to mention here.